General Instructions

Purpose of Form

Both the seller and purchaser of a group of assets that makes up a trade or business must use Form 8594 to report such a sale
if goodwill or going concern value attaches, or could attach, to such assets and if the purchaser's basis in the assets is
determined only by the amount paid for the assets.

Form 8594 must also be filed if the purchaser or seller is amending an original or a previously filed supplemental Form 8594
because of an increase or decrease in the purchaser's cost of the assets or the amount realized by the seller.

Who Must File

Generally, both the purchaser and seller must file Form 8594 and attach it to their income tax returns (Forms 1040, 1041,
1065, 1120, 1120S, etc.) when there is a transfer of a group of assets that make up a trade or business (defined below) and
the purchaser's basis in such assets is determined wholly by the amount paid for the assets. This applies whether the group
of assets constitutes a trade or business in the hands of the seller, the purchaser, or both.

If the purchaser or seller is a controlled foreign corporation (CFC), each U.S. shareholder should attach Form 8594 to its
Form 5471.

Exceptions.
You are not required to file Form 8594 if any of the following apply.

A group of assets that makes up a trade or business is exchanged for like-kind property in a transaction to which section
1031 applies. If section 1031 does not apply to all the assets transferred, however, Form 8594 is required for the part of
the group of assets to which section 1031 does not apply. For information about such a transaction, see Regulations sections
1.1031(j)-1(b) and 1.1060-1(b)(8).

A partnership interest is transferred. See Regulations section 1.755-1(d) for special reporting requirements. However, the
purchase of a partnership interest that is treated for federal income tax purposes as a purchase of partnership assets, which
constitute a trade or business, is subject to section 1060. In this case, the purchaser must file Form 8594. See Rev. Rul.
99-6, 1999-6, I.R.B. 6, available at http://www.irs.gov/pub/irs-irbs/irb99-06.pdf.

When To File

Generally, attach Form 8594 to your income tax return for the year in which the sale date occurred.

If the amount allocated to any asset is increased or decreased after the year in which the sale occurs, the seller and/or
purchaser (whoever is affected) must complete Parts I and III of Form 8594 and attach the form to the income tax return for
the year in which the increase or decrease is taken into account.

Penalties

If you do not file a correct Form 8594 by the due date of your return and you cannot show reasonable cause, you may be subject
to penalties. See sections 6721 through 6724.

Definitions

Trade or business.
A group of assets makes up a trade or business if goodwill or going concern value could under any circumstances attach
to such assets. A group of assets can also qualify as a trade or business if it qualifies as an active trade or business under
section 355 (relating to distributions of stock in controlled corporations).

The presence of any section 197 or other intangible assets (provided that the transfer of such an asset in the absence of
other assets will not be a trade or business);

Any excess of the total paid for the assets over the aggregate book value of the assets (other than goodwill or going concern
value) as shown in the purchaser's financial accounting books and records; or

A license, a lease agreement, a covenant not to compete, a management contract, an employment contract, or other similar agreements
between purchaser and seller (or managers, directors, owners, or employees of the seller).

Consideration.
The purchaser's consideration is the cost of the assets. The seller's consideration is the amount realized.

Fair market value.
Fair market value is the gross fair market value unreduced by mortgages, liens, pledges, or other liabilities. However,
for determining the seller's gain or loss, generally, the fair market value of any property is treated as being not less than
any nonrecourse debt to which the property is subject. Also, a liability that was incurred as a result of the acquisition
of the property is disregarded to the extent that such liability was not taken into account in determining the basis in such
property.

Classes of assets.
The following definitions are the classifications for deemed or actual asset acquisitions.

Class I assets are cash and general deposit accounts (including savings and checking accounts) other than certificates of deposit held in
banks, savings and loan associations, and other depository institutions.

Class II assets are actively traded personal property within the meaning of section 1092(d)(1) and Regulations section 1.1092(d)-1 (determined
without regard to section 1092(d)(3)). In addition, Class II assets include certificates of deposit and foreign currency even
if they are not actively traded personal property. Class II assets do not include stock of seller's affiliates, whether or
not actively traded, other than actively traded stock described in section 1504(a)(4). Examples of Class II assets include
U.S. government securities and publicly traded stock.

Class III assets are assets that the taxpayer marks-to-market at least annually for federal income tax purposes and debt instruments (including
accounts receivable). However, Class III assets do not include:

Debt instruments issued by persons related at the beginning of the day following the acquisition date to the target under
section 267(b) or 707;

Contingent debt instruments subject to Regulations sections 1.1275-4 and 1.483-4, or section 988, unless the instrument is
subject to the noncontingent bond method of Regulations section 1.1275-4(b) or is described in Regulations section 1.988-2(b)(2)(i)(B)(2);
and

Debt instruments convertible into the stock of the issuer or other property.

Class IV assets are stock in trade of the taxpayer or other property of a kind that would properly be included in the inventory of the taxpayer
if on hand at the close of the taxable year, or property held by the taxpayer primarily for sale to customers in the ordinary
course of its trade or business.

Class VII assets are goodwill and going concern value (whether or not the goodwill or going concern value qualifies as a section 197 intangible).

Allocation of consideration.
An allocation of the purchase price must be made to determine the purchaser's basis in each acquired asset and the
seller's gain or loss on the transfer of each asset. Use the residual method under sections 1.338-6 and 1.338-7, substituting
consideration for ADSP and AGUB, for the allocation of the consideration to assets sold and asset purchased respectively.
See Regulations section 1.1060-1(c).

The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase
date. The amount you can allocate to an asset also is subject to any applicable limits under the Internal Revenue Code or
general principles of tax law.

Consideration should be allocated as follows.

Reduce the consideration by the amount of Class I assets transferred.

Allocate the remaining consideration to Class II assets, then to Class III, IV, V, and VI assets in that order. Within each
class, allocate the remaining consideration to the class assets in proportion to their fair market values on the purchase
date.

Allocate consideration to Class VII assets.

If an asset in one of the classifications described above can be included in more than one class, choose the lower
numbered class (e.g., if an asset could be included in Class III or IV, choose Class III).

Reallocation after an increase or decrease in consideration.
If an increase or decrease in consideration that must be taken into account to redetermine the seller's amount realized
on the sale, or the purchaser's cost basis in the assets, occurs after the purchase date, the seller and/or purchaser must
allocate the increase or decrease among the assets. If the increase or decrease occurs in the same tax year as the purchase
date, consider the increase or decrease to have occurred on the purchase date. If the increase or decrease occurs after the
tax year of the purchase date, consider it in the tax year in which it occurs.

For an increase or decrease related to a patent, copyright, etc., see Specific Allocation, later.

Allocation of increase.

Allocate an increase in consideration as follows.

Allocate the increase in consideration to Class I assets.

Allocate any remaining amount consideration to each of the following classes (Class II, III, etc.).

The number of classes may vary depending on the year of the acquisition. Increase the amounts previously allocated to the
assets in each class in proportion to their fair market values on the purchase date (do not allocate to any asset in excess
of fair market value).

If an asset has been disposed of, depreciated, amortized, or depleted by the purchaser before the increase occurs, any amount
allocated to that asset by the purchaser must be properly taken into account under principles of tax law applicable when part
of the cost of an asset (not previously reflected in its basis) is paid after the asset has been disposed of, depreciated,
amortized, or depleted.

Allocation of decrease.

Allocate a decrease in consideration as follows.

Reduce the amount previously allocated to Class VII assets.

Reduce the amount previously allocated to Class VI assets, then to Class V, IV, III, and II assets in that order. Within each
class, allocate the decrease among the class assets in proportion to their fair market values on the purchase date.

You cannot decrease the amount allocated to an asset below zero. If an asset has a basis of zero at the time the decrease
is taken into account because it has been disposed of, depreciated, amortized, or depleted by the purchaser under section
1060, the decrease in consideration allocable to such asset must be properly taken into account under the principles of tax
law applicable when the cost of an asset (previously reflected in basis) is reduced after the asset has been disposed of,
depreciated, amortized, or depleted. An asset is considered to have been disposed of to the extent the decrease allocated
to it would reduce its basis below zero.

Patents, copyrights, and similar property.
You must make a specific allocation (defined below) if an increase or decrease in consideration is the result of a
contingency that directly relates to income produced by a particular intangible asset, such as a patent, a secret process,
or a copyright, and the increase or decrease is related only to such asset and not to other assets. If the specific allocation
rule does not apply, make an allocation of any increase or decrease as you would for any other assets as described under Allocation of increase and Allocation of decrease.

Specific allocation.
Limited to the fair market value of the asset, any increase or decrease in consideration is allocated first specifically
to the patent, copyright, or similar property to which the increase or decrease relates, and then to the other assets in the
order described under Allocation of increase and Allocation of decrease. For purposes of applying the fair market value limit to the patent, copyright, or similar property, the fair market value
of such asset is redetermined when the increase or decrease is taken into account by considering only the reasons for the
increase or decrease. The fair market values of the other assets are not redetermined.